India moving rapidly towards Gas-based economy with exponential growth in CGD space

No.PR-163 July 14, 2020 New Delhi India moving rapidly towards Gas-based economy with exponential growth in CGD space With a lot of steps taken towards making India a gas-based economy, PHD Chamber of Commerce and Industry hosted a webinar on ‘City Gas Distribution 2020- Challenges and Opportunities’ with Mr. D.K. Sarraf, Chair, PNGRB and Mr. A.K Jana, Managing Director, Indraprastha Gas Ltd. Mr. D.K. Sarraf in his deliberation discussed that there is a need to create more demand for natural gas as its environment friendly, less emission of Co2, and many more. Our Hon’ble Prime Minister had committed in 2015 that carbon emission intensity would reduce by 2030. He discussed natural gas, its background, and its value addition aspects. He further discussed the domestic aspect of natural gas, which include cost-effectiveness, affordability, low in tax arbitrate. The ratio of the price of natural gas to oil prices is increasing. The overall price in oil prices will be more dependent on demand, supply, and new exploration results, and so on. Mr. Sarraf highlighted that businesses should arbitrate as a major consumer of fuel. It’s time for the government to deregulate the price that will help to boost the gas industry. Gas is something that requires a huge infrastructure in terms of import, transportations, and last-mile connectivity. The natural gas pipelines are expanding their pipelines in the last few years, trying to expand itself in every part of the country that is financially supported by the government. He discussed the new projects and terminals that are leading to expanding the bandwidth of pipelines gas supply chain across the country. He also talked about the policy reforms which are under up-gradation so that the tariffs of different pipelines could be unified and other regulations. There need to a new investment model needs to make leading improvements in the process. There will be an introduction of exchange in gas with the objective that the confidence of the gas consumer, importer, and everyone else in the system will increase as it would be ensured with a fair price of gas from the viewpoint of the supplier as well as the consumer. This will be coupled with other reforms that include more transparency, free access to natural gas pipelines, an online real-time bulletin board of the pipeline capacity, and other reforms as well. Mr. A.K Jana in his remarks mentioned that in this unprecedented crisis, we could maintain the supply of gas to the houses and in petrol and CNG pumps. While talking about the gas-based economy, he discussed the benefit of natural gas that is cheaper, eco-friendly and helps to reduce the import deal to create self-sufficiency in energy and diversification of sources as well as in the energy basket. Mr. Jana mentioned that city gas is being highly consumed in the fertilizer sector and with a CAGR of more than 18%. The gas price is falling at the same time people as well as the government is focusing on the creation of infrastructure. We have given a huge thrust expansion of pipelines to the eastern of India in the past few years so that the entire country is connected to the national gas pipeline. To make it affordable, he mentioned that companies are working to make price uniformed and affordable. Despite COVID-19 and lockdowns, the decline in the gas sector has been less as compared to other sectors. Our consumption in the domestic sector has increased as its contactless gas available in the kitchen. In the future, gas consumption across different sectors will increase. For this industry, there is a need to redefine the 4W’s that are Work, Work Place, Work Culture, and Work Force. We need to create a safe environment, redefine the process, take care of sanitization, digitalize some processes, and take care of our employees, said Mr. Jana. Mr. Jana highlighted that in the lines of self-reliant India, we are in a mass volume consumer meter and having low engineering best products that can help us achieve the mission of self-reliant India. Under this, we have started to manufacture in India including compressors and other components. Many entities are working but the challenge is how to get back to normal business and overcoming the problem faced due to COVID situations. Other challenges are the meet the huge demand of 9th and 10th bidding, expanding in terms of digitalization and infrastructure. We are expanding and up skilling ourselves to curb these challenges. Mr. D.K Aggarwal, President, PHD Chamber of Commerce and Industry in his presidential remarks deliberated about the recent developments in the city gas-distributing to achieve the gas-based economy and number 1 energy user in the world. Dr Aggarwal also called for bringing the natural gas under GST to eliminate the cascading effect of taxes and to bring the uniformity in the sector to make it more attractive for investors. He discussed the demand expected to come from sectors like steel, fertilizers, power, and the city gas distribution sector. There has been a push to increase the city gas distribution and after 10th round, more than 70% of the population and 50% of the geographical area will be covered. While lauding the steps of the government and ministries in building the city gas distribution network, he mentioned that the government is spending a lot of finances and planning in creating a gas infrastructure. The expansion in the gas grid in the next few years and entering long term contracts with private players for ensuring regular supply will give ignition to this industry. He further discussed the challenges faced by the industry that include industry input credit of purchases, pipeline infrastructure contracts, and absence of qualified vendor, land availability, and many more. He said that we need to focus on mainstream exploration. He raised questions about the other measures being taken by the Indian Government in making this industry self-reliant. Mr. Rajeev Mathur, Chair, Hydrocarbons Committee, PHD Chamber, and Executive Director Corp affairs/AM GAIL, gave an industry perspective suggesting upgrading the quality of equipment & manufacture in terms of fitting, compressor, instrumentation, and others should be taken in consideration. He shared industry insights and growth prospects by representing statistics from various industry reports along with different challenges and opportunities. Mr. Pawan Tibrawalla, Co-Chair, PHD Hydrocarbon Committee delivered a formal vote of thanks to all the delegates and participants. The webinar was moderated by Dr. Ranjeet Mehta, Principal Director, PHD Chamber, and attended by Mr. Saurabh Sanyal, Secretary-General, PHD Chamber, and other senior members of PHD Chamber. It witnessed a participation of more than 90 industry stalwarts Pan-India. Ends Media Division PHD Chamber of Commerce and Industry